Helleberg v. Estes

943 N.W.2d 837

Katrine B. HELLEBERG, Sylvia J. Cox and Tracy K. Heeter, Plaintiffs and Appellees,

v.Thomas L. ESTES and Wanda L. Estes, Defendants and Appellants.

#28954

Supreme Court of South Dakota.

CONSIDERED ON BRIEFS MARCH 17, 2020

OPINION FILED May 13, 2020

FRANK A. BETTMANN of Bettmann Hogue Law Firm, Prof. LLC, Rapid City, South Dakota, Attorneys for plaintiffs and appellees.

BRIAN L. UTZMAN of Smoot & Utzman, P.C., Rapid City, South Dakota, Attorneys for defendants and appellants.

JENSEN, Justice

[¶1.] Thomas Estes owns Lots 3 and 4R2 in Estes Subdivision located in Pennington County, South Dakota. Katrine Helleberg owns Lot 2R within the Estes Subdivision. Tracy Heeter and Sylvia Cox (Heeter/Cox) live in a home located on Lot 2R. Sometime after 2008, hostilities developed between Estes and Heeter/Cox concerning Estes’ use of a road (Easement Road) that crossed Lot 2R.

[¶2.] Unable to resolve their differences, the parties filed multiple claims against one another in this action. Several of the claims were settled or resolved on summary judgment. The circuit court heard and resolved the remaining claims during a bench trial. Estes appeals the circuit court’s following determinations: (1) that a limited private easement granted Estes the right of access across Lot 2R solely to repair or install water lines; and (2) that a prescriptive easement did not exist in favor of Estes for the use of the Easement Road on Lot 2R. We affirm the circuit court on both issues.

Facts and Procedural History

[¶3.] Estes Subdivision is located on 40 acres of land that had been owned by Estes’ parents since at least 1959, when they moved into a home on the property. In 1977, Estes’ father decided to subdivide the 40 acres for the purpose of selling residential lots. Lot 2, consisting of 2.99 acres, was platted and sold to Eugene and Linda Mikuska (Mikuskas) in 1977.

[¶4.] The same year, Estes’ father drilled a well on Lot 4R2 and installed a water line to supply water to residences within Estes Subdivision. The water line roughly followed the path of the Easement Road. In 1985, the Estes family imposed restrictive covenants for the lots within Estes Subdivision by signing a Declaration of Protective and Restrictive Covenants (Covenants).¹ The Covenants burdened the lots within Estes Subdivision with the following access easement: "The right of access to repair or install the water lines and to build an access road and use said access road over the water line is hereby granted by owner."

[¶5.] In 1991, Mikuskas conveyed Lot 2 to John and Phyllis Cram by contract for deed. In 2002, Lot 2 was replatted as Lot 2R. The replat added approximately seven additional acres as part of Lot 2R. Estes deeded Lot 2R to the Crams by warranty deed in 2003. Lot 2R was adjacent to the south of Lot 4R2. In 2008, Heeter/Cox purchased Lot 2R from the Crams. Heeter/Cox conveyed by quitclaim deed Lot 2R to Helleberg, Cox’s daughter, on July 2, 2008, but Heeter/Cox continued to reside on the property.

[¶6.] Estes testified that the Easement Road had been used for various purposes from the time his parents moved onto the land in addition to using the Easement Road for the repair and installation of the water lines. It is clear that when Lot 2 was replatted and expanded from 2.99 acres to 10 acres in 2003, the Easement Road was located on replatted Lot 2R. However, the evidence was disputed whether the Easement Road crossed Lot 2 during the period from 1977 until 2003 prior to the replat. Heeter/Cox assert that the Easement Road was located on land owned by Estes until the replat in 2003, when Lot 2 was expanded to Lot 2R and conveyed to the Crams. Estes claims, to the contrary, that the Easement Road was located on Lot 2 in 1977 when the lot was originally platted and he did not thereafter own the land underlying the portion of the Easement Road on Lot 2. A survey done on January 1, 2018 suggests that the Easement Road may in fact have crossed the former Lot 2.²

[¶7.] On June 6, 2013, Heeter/Cox and Helleberg filed a complaint against Estes. The complaint sought a declaratory judgment that the water system in the Estes Subdivision was not owned by Estes and that Estes was not entitled to the monies generated from the water system. The complaint also requested the appointment of a receiver and injunctive relief. On July 3, 2013, Estes filed an answer and counterclaim seeking a declaration concerning Estes’ right of access to use Lot 2R and the Easement Road on Lot 2R, and a declaration that Estes owned the water system. Estes also counterclaimed for assault and battery.³ The assault and battery claim was bifurcated from the other claims and eventually settled.

[¶8.] On December 30, 2014, the circuit court granted Estes’ motion for partial summary judgment, determining that Estes owned the water system, the revenues generated from it, and that Estes had the right to control the water system. Heeter/Cox did not appeal this determination.

[¶9.] On November 27, 2018, the circuit court held a bench trial on the remaining issues, including Estes’ easement rights on Lot 2R. At the conclusion of the trial, the court orally ruled that the Covenants granted Estes a limited private easement to access Lot 2R to install and repair water lines. The court also determined that Estes did not have a prescriptive easement for the Easement Road that crossed Lot 2R. Estes appeals from the written judgment incorporating the court’s rulings.⁴

Analysis and Decision

[¶10.] "The interpretation of a restrictive covenant is a legal question which we review de novo." Harlan v. Frawley Ranches PUD Homeowners Ass'n, Inc. , 2017 S.D. 54, ¶ 6, 901 N.W.2d 747, 750. We review " ‘declaratory judgments as we do any other order, judgment, or decree’ giving no deference to a circuit court’s conclusions of law under the de novo standard of review." In re Pooled Advocate Trust , 2012 S.D. 24, ¶ 20, 813 N.W.2d 130, 138 (quoting Fraternal Order of Eagles No. 2421 of Vermillion v. Hasse , 2000 S.D. 139, ¶ 8, 618 N.W.2d 735, 737 ). However, "[f]indings of fact ... may not be set aside unless clearly erroneous ...." Estate of Henderson v. Estate of Henderson , 2012 S.D. 80, ¶ 9, 823 N.W.2d 363, 366 (quoting SDCL 15-6-52(a) ).

1. Whether the circuit court erred when it limited the private easement granted in the Covenants to the installation and repair of water lines.

[¶11.] Estes claims that the circuit court erred in its determination that the private easement grants a right of access across Lot 2R solely for the repair or installation of the water lines. Estes urges that the circuit court failed to give effect to all of the provisions of the Covenants by ignoring the language that states, "to build an access road and use said access road over the water line." Appellees argue that the circuit court did not err in restricting Estes’ use of the easement because the limitation solely for use to repair and install water lines was clearly and expressly provided for in the 1985 Covenants.

[¶12.] We apply the rules of contract interpretation to interpret the Covenants. See Jackson v. Canyon Place Homeowner’s Ass'n, Inc. , 2007 S.D. 37, ¶ 9, 731 N.W.2d 210, 212. Here, the parties acknowledge that the Covenants are not ambiguous. We agree. The language of the Covenants is unambiguous when viewed objectively and in the context of the entire Declaration of Protective and Restrictive Covenants. "[A] contract is ambiguous only when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement." Coffey v. Coffey , 2016 S.D. 96, ¶ 9, 888 N.W.2d 805, 809 (quoting Dowling Family P’ship v. Midland Farms , 2015 S.D. 50, ¶ 13, 865 N.W.2d 854, 860 ).

[¶13.] "When the meaning of contractual language is plain and unambiguous, construction is not necessary." Ziegler Furniture & Funeral Home, Inc. v. Cicmanec , 2006 S.D. 6, ¶ 14, 709 N.W.2d 350, 354 (quoting Pesicka v. Pesicka , 2000 S.D. 137, ¶ 6, 618 N.W.2d 725, 726 ). Instead, "to ascertain the terms and conditions of a contract, we must examine the contract as a whole and give words their plain and ordinary meaning." Coffey , 2016 S.D. 96, ¶ 8, 888 N.W.2d at 809 (internal quotation marks and citations omitted). Further, when the language of a restrictive covenant is unambiguous, "its meaning must be determined from the four corners of the instrument without resort to extrinsic evidence of any nature." Jackson , 2007 S.D. 37, ¶ 9, 731 N.W.2d at 212 (quoting Halls v. White , 2006 S.D. 47, ¶ 7, 715 N.W.2d 577, 580-81 ).

[¶14.] The plain language of the Covenants provides for a limited easement on the lots within Estes Subdivision to: (1) repair or install water lines; and to (2) build an access road and use said access road over the water line. The language of the easement is included within the provisions dealing exclusively with the water system. These provisions detail the rights and duties related to the water line and water system. Further, the only reference to the building and use of a road within Estes Subdivision is in relation to the water lines. There is no language expressing an intention to allow the expanded use of the Easement Road for other purposes.

[¶15.] Estes argues that the circuit court impermissibly rendered the language "to build an access road and use said access road over the water line ..." meaningless. Estes asserts that the words "and use said access road" grants him the right to use the Easement Road for any purpose. However, the language, when read within the whole of the Covenants, indicates that the sole purpose of the easement is to grant access to repair or install the water lines within the Estes Subdivision.

[¶16.] As the circuit court determined, "if, in fact, the Esteses had intended at any time that the land would be used to haul sticks off or tree limbs or 10-foot pieces of pipe, they most certainly would have included it in the...